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,Questions. Suppose there are two types of persons: high-ability and low ability. A particular dipolma costs a high-ability person $30,000 and costs a low-ability person
,Questions.
Suppose there are two types of persons: high-ability and low ability. A particular dipolma costs a high-ability person $30,000 and costs a low-ability person $50,000. firms wish to use education as a screening device where they intend to pay $100,000 to workers without a diploma and $K to those with a diploma. In what range must K be to make this an effective screening device?
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